HarperCollins’ Win Is a Big Loss (And Not Only For Readers)

Have you tried to download the e-book version of Jean Craighead George’s Newbery Award-winning Julie of the Wolves recently?

Well, it hasn’t been available in the U.S. since last April, when I was lucky enough to download it to my Kindle.

Between October 2011 and April 2014, Open Road Integrated Media sold the e-book version after offering George a 50% royalty that HarperCollins, the publisher of the paper versions, refused to match. Instead of paying George a fair royalty for her work, HarperCollins decided to pay its lawyers a very large sum of money to fight for the right to control the e-book version of Julie of Wolves on its own terms.

I disagree with the district court’s analysis of the 1971 George–HarperCollins contract because the terms of the contract (1) gave HarperCollins the right to publish the novel in book form (as defined in 1971); and (2) reserved to George all other publishing rights. Plus, even if the 1971 contract included e-books (back when there was no such thing as even a household computer), HarperCollins breached the contract by insisting on a meager 25% royalty instead the 50% royalty referenced in the very same sentence of the 1971 contract they claim gives them the e-book rights.

Eight months later, on November 6, 2014, the Court gave HarperCollins injunctive relief that prohibits Open Road from publishing Julie of the Wolves, in addition to $30,000 in damages and a little over $7,000 in costs.

What the Court did not give HarperCollins, though, was even one dime of the more than $1 million it requested in attorneys fees (which was only 70% of the fees that outside counsel charged to HarperCollins in connection with this case!) because Open Road’s position, while unsuccessful, wasn’t “objectively unreasonable.”

As the Court explained:

[T]he mere fact that the Court was able to interpret the contract as a matter of law does not mean that the contrary argument was clearly unmeritorious or patently devoid of support. Our reticence to characterize the losing position as objectively unreasonable is informed by the fact that this dispute arose in the context of a developing, and still somewhat uncharted, area of copyright law.

I’d certainly say that Open Road’s position wasn’t “objectively unreasonable” because, as I’ve previously explained, I would’ve decided the case in their favor!

So, who are the winners and losers here?

Well, the losers include readers and traditionally-published authors, because the Court has allowed a publishing corporation to hold an e-book for ransom by refusing to honor the terms of its own agreement with the author and leaving the author powerless to take the work to other publishers. However, that control comes at a hefty price for the company: well over a million dollars in outside counsel fees.

In the end, it seems that the only real winners here are the lawyers who have everything to gain from litigious corporations willing to pay high attorney fees to ensure their “right” to nickle and dime authors.

Congratulations, HarperCollins, for spending a million dollars to throw one of your own authors to the wolves.* You suck.

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*So to speak. This analogy might not hold up for those who have actually read Julie of the Wolves!

That’s exactly how I feel about traditional publishing now! It’s a scam. It amazes that that these publishing corporations act as though they’re going under while paying lawyers a ton of money to oppress writers. It’s very sad.

It’s shameful how HarperCollins felt it was appropriate to spend well over a $1 million in legal fees just to protect its “right” to hold their own author’s books hostage. Just think of how many royalty advances they could have paid to struggling authors, but, instead, they hired a firm notorious for its extreme billing and told the firm to spare no expense sending a message to its authors: either suffer through our unreasonable terms or we’ll see you in court.

“Congratulations, HarperCollins, for spending a million dollars to throw one of your own authors to the wolves.* You suck.”

I totally agree with this summation. What a horrible thing to do to a writer. The money they spent in court could have been paid to the author in royalties for the book! It seems trad publishing’s nose is so out of joint over ebooks these days, they’re willing to cut it off than be reasonable.

Indeed! As Judge Buchwald said (Footnote 15): “Were we to reach the issue of the amount of fees, we would include in our calculus HarperCollins’ initial decision not to match the royalty offer made to Ms. George. Had HarperCollins agreed to match the fifty percent royalty offer, Ms. George would not have come to terms with Open Road and there would have been no disproportionately costly litigation.”

Thankfully, it seems like the Court is now trying to limit its March opinion granting summary judgment to HarperCollins in the copyright infringement claim against Open Road. I hope that other traditional publishing corporations will see how unnecessarily costly this litigation was–and how little HarperCollins recovered–the next time they consider involving outside counsel when bickering over royalties with authors, but I’ve seen enough litigation to know that many corporations are happy to throw money at lawyers rather than do the right thing in the first place (whether it’s for authors, employees, or consumers).